The Government could be £217m worse off because its inflation busting duty hikes have shut so many pubs.
The warning comes from the Association of Licensed Multiple Retailers on the day the industry will hold crunch talks with five senior Government ministers.
Revenue & Customs receipt figures show that, in January, the Government collected the lowest amount of revenue from alcohol duty for seven years following the combined 17% duty rise last year. This could mean a £217m drop over the year if the trend continues.
The British Beer and Pub Association predicted that the drop in revenue could reach £1.6bn if a further 2% above inflation rise is added in April.
"The Government's own figures speak for themselves — the alcohol duty escalator means that the Treasury is losing money and killing pubs in the process," said ALMR chief executive Nick Bish.
"Messrs Brown and Darling need to take a long hard look at these figures and realise that their twice yearly raids on pub and bar tills are not doing them any good. All they are doing is putting more and more of Britain's hard working publicans out of business and their staff out of work.
"Unlike the big supermarkets that are thriving during this recession, pubs don't bully suppliers into absorbing the cost of duty rises. As a result, the added expense of drinking by the bar is forcing punters away, leading to less business for pubs and less revenue for the Government.
"It's time for these duty rises to stop. The evidence is clear. Closed pubs don't pay tax."